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London · OntarioInvestment

Financing a London rental property

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100% rental offsetBRRRRDSCRMLI Select
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Quick scenario · London
On a $590,550 London home
Down payment
20% — min for investment property mortgages
$118,110
Mortgage amount
At 4.69% · 30-yr amort
$472,440
ON LTT
Provincial closing cost
$8,286
Est. monthly payment
Principal + interest only
$2,435/mo
Investment property rate — uninsured. Default insurance is not available on a property you do not live in, so 4.69% carries a premium over an owner-occupied rate. Property tax at Ontario’s 1% average residential rate — municipal rates vary, so confirm yours adds $492/mo, so this property has to rent for $2,927/mo to break even before insurance, maintenance or vacancy.
Illustrative only. Actual rate, qualifying amount, and premium depend on your file. A licensed advisor will give you the exact number for your file.
Investment property mortgages in London — the local picture

London's average price was $590,550 in August 2026. A London rental at the $590,550 average price needs $118,110 down and carries $2,435/mo in principal and interest plus $492/mo in property tax at Ontario's 1% average residential rate — so it has to rent for $2,927 a month before insurance, maintenance or a single vacant week to break even. That figure, not a rent we found on a listing site, is the number to test an Old North or Westmount property against: bring the actual rent on the actual unit, and the gap between it and $2,927 is the file. Clearing it by 10% — about $3,220 a month — is where a debt-service-coverage lender starts to look at the property rather than at you.

Middlesex & Elgin average residential price, London and St. Thomas Association of REALTORS® (via CREA), August 2026. Source.

Written by the Mortgage Squad Advisors Editorial Team · Reviewed by Surrayya Afzal, Principal Broker, FSRA #M14001433 · Brokerage FSRA #13737 · Figures current to August 2026

All mortgages in London| Investment property mortgages guide| Rental cashflow calculator
Max LTV (1-4)
80%
Uninsured rental
MLI Select 5+
95%
With point-stack
Rental offset
100%
At specialty lenders
Amortization
30 yr
Uninsured / 50 yr MLI

Investment property mortgages: London against the markets around it

The same arithmetic (the 20% this product usually needs) on each market’s own published figure. Rates do not change across the boundary; the price does, and with it the file.

MarketPrice20% downvs London
London$590,550 average$118,110—
Brantford$692,096 average$138,419+$20,309
Windsor$541,019 average$108,204−$9,906
Sarnia$535,819 average$107,164−$10,946
Chatham-Kent$429,223 average$85,845−$32,265

Each figure is that market’s own board release, as cited on its page. Illustrative arithmetic, not a quote.

The rent this London property has to produce

The break-even row covers principal, interest and London property tax only.

Monthly rentGap vs carrying costGross yieldGRMDSCR
$2,927Break-even on principal, interest and property tax$0/mo5.95%16.8×1.00
$3,220Rent needed to clear a 1.10 debt service coverage ratio+$293/mo6.54%15.3×1.10
$3,659Rent needed to clear a 1.25 debt service coverage ratio+$732/mo7.44%13.4×1.25

Carrying cost is $2,435/mo principal and interest at 4.69% over 30 years on a $472,440 mortgage, plus $492/mo property tax. Rent rows are the property’s own requirement, not a market rent. Tax at Ontario’s 1% provincial average — an estimate; confirm your municipality’s rate.

Qualifying income under each rental offset method

At $2,927/mo of rent, tested at the 6.69% qualifying rate rather than the 4.69% contract rate.

MethodHow the rent is readRent countedHousehold income needed
50% offsetThe most conservative reading, and the one that leaves your personal income carrying the file.Half the rent is netted against the property's own carrying cost$1,464/mo$68,000
80% add to incomeThe common default across big-bank and monoline lenders.80% of the rent is added to your gross income$2,342/mo$84,000
100% offsetOffered by a minority of A-lenders and credit unions, and the method that decides whether a portfolio can keep growing.The full rent is netted against the property's carrying cost$2,927/mo$23,000

GDS capped at 39% including property tax and heat. Illustrative.

Yield, cap rate, GRM and DSCR on London numbers

Four metrics decide whether an investor takes a property seriously, and all four are arithmetic you can check. Gross rental yield is annual rent over purchase price: at the $2,927 break-even rent that is 5.95% against London's $590,550 average price. Cap rate is net operating income over price; using the property tax above and nothing else, it comes to 4.95%, and the true figure is lower still once insurance, maintenance and management are in. The gross rent multiplier — price over annual rent — is 16.8 times, where under 15 is generally read as a cash-flow market and anything past 20 as an appreciation market. And the debt service coverage ratio, rent over principal, interest and property tax, is 1.00. Canadian alt-A lenders that underwrite on DSCR typically want 1.10 to 1.25, and CMHC's own multi-unit minimum is 1.10. Read against the break-even rent that ratio is 1.00 by construction — break-even IS a coverage ratio of 1.00 — which is the point: a property renting at exactly its carrying cost fails a DSCR lender's test, and the rent has to reach $3,220 before one starts looking, or $3,659 at the strict end of the band. None of that says London is a bad market. It says a single-unit rental at these prices and this rate is bought for appreciation, mortgage paydown and the tax treatment rather than for monthly cash flow, and any page telling you otherwise is selling you something.

How an investment property mortgage works — the rules, the penalties and the paperwork that are the same in every city — is covered in full on our investment property mortgages guide. This page keeps to what is different in London.

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Investment property mortgages across London

From Old North to Oakridge, the dominant property form in each pocket changes how an investment property file is underwritten.

Old North, Westmount, Byron, Wortley Village, Oakridge

Century detached near the university · 1960s–80s detached subdivision · Established detached beside the river valley · Century detached and semi, heritage character · Post-war and 1970s detached

Older stock is where legal secondary suites are most often found, and rental income only enters your qualifying calculation once the suite is legal and permitted — an unregistered unit is worth nothing to the lender.

Hyde Park

Newer detached and townhouse subdivision

Assignment and interim-occupancy rules on a builder purchase decide whether an investor can close at all, and default insurance is unavailable on a property you do not occupy, so 20% down is the floor here.

Masonville

Detached and condo near the university and hospital

The corporation's rental share is the gate on an investor file: buildings already near their rental cap can stop the purchase regardless of your income, and status-certificate review comes before financing, not after.

Regional Ontario lenders we shop — alongside the Big-6 banks and national monolines:

Meridian DUCA Alterna Savings FirstOntario
London market

What London’s market means for your investment property mortgage.

London's student-rental market is a rental-income underwriting question

A large share of London's investor activity clusters around the university and college catchments, and buying a property to rent by the room is not underwritten the way a single-tenant rental is. Two things decide these files. The first is how the lender counts the rent: a rental add-back adds roughly half the gross rent to your income, while a rental offset nets a larger share — often around 80% — directly against the property's carrying cost. On a property whose rent is strong relative to price, which is the usual London case, the offset method is materially more generous and can be the difference between qualifying and not. The second is what the property legally is. A house rented to several unrelated students may be a lodging house under the municipality's licensing regime, and a lender's willingness to fund it — and an insurer's willingness to cover it — turns on that classification rather than on how the listing describes it. A non-owner-occupied rental also cannot be default-insured, so 20% down is the floor regardless of price. The exception worth knowing is the owner-occupied multi-unit rule: an owner-occupied duplex can use the insured tiered minimum (5% on the first $500,000, 10% above), and an owner-occupied triplex or fourplex can be insured with at least 10% down, on purchases up to $1.5 million — which in a market at London's price points is a genuinely different entry point.

Older stock, insurability, and what closing actually costs in London

London's character housing — Old North, Wortley Village, the streets around the university — is part of the city's appeal and a recurring source of financing friction. Knob-and-tube wiring, galvanised or lead supply plumbing, an aged oil tank, or a roof near the end of its life can all affect whether a property insurer will bind coverage. That matters more than it sounds: a lender will not advance funds on a home that cannot be insured, so an insurability problem is a mortgage problem even when the mortgage approval itself is clean. Where the work is planned rather than avoidable, a purchase-plus-improvements structure lets the lender advance against the as-improved appraised value, with the improvement money held back and released once the work is verified — which requires quotes up front and enough cash to carry the job in the meantime. On closing costs, London sits in Middlesex County and pays Ontario land transfer tax only; there is no municipal land transfer tax of the kind the City of Toronto charges. At London price points the first-time-buyer rebate of up to $4,000 therefore covers a substantial share of the entire bill, sometimes all of it. Budget the rest of the stack — legal fees, title insurance, inspection, appraisal, prepaid-tax adjustments — at roughly 1.5% to 4% of price.

An illustrative London file: the rent was real, the classification wasn't

This is an illustrative composite assembled from the rules above — not a specific client, and not a promised outcome. An investor budgets a London purchase around per-room student rent, which on paper more than services the mortgage. The file runs into two separate walls. First, the lender applies a rental add-back rather than an offset, counting roughly half the gross rent toward income instead of netting most of it against carrying costs — and the debt-service ratios, tested at the stress-test rate, no longer clear. Second, the property's use may require municipal licensing that the seller does not hold, which narrows both the lender list and the insurance options. Neither problem is about the borrower. Both are answerable before an offer: ask which method a lender uses before choosing one, and confirm the property's classification and licensing status rather than inferring it from the current tenancy. Run the same buyer at an owner-occupied duplex under the federal 2-to-4-unit policy and the entry cost falls dramatically. Every real file is assessed on its own facts.

FAQ

Investment property mortgages in London — common questions.

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What does an investment property mortgage work out to on London's August 2026 average price?
Middlesex & Elgin average residential price, London and St. Thomas Association of REALTORS® (via CREA) put the London average at $590,550 for August 2026. For an investment property mortgage that makes the 20% down about $118,110 (the 20% this product usually needs). The same board counted 526 London sales in August 2026. Your own property and balance replace these numbers on the file.
How does London compare with Brantford, Windsor and Sarnia for an investment property mortgage?
On each market's own cited figure, the 20% down is $118,110 in London against Brantford $138,419 (average $692,096); Windsor $108,204 (average $541,019); Sarnia $107,164 (average $535,819). The comparison is the same arithmetic on a different price, which is why moving the search one municipality over changes the file before it changes the rate — lenders price the same product the same way across Ontario.
What transfer tax applies to a $590,550 purchase in London?
About $8,286 at the average. It is paid in cash on closing (or, in Quebec, billed by the municipality afterwards) and cannot be added to the mortgage. An eligible first-time buyer recovers about $4,000 of it through the Ontario relief that applies here. Our land transfer tax calculator runs your own price.
What's the average investment property file size in London?
London's average price is approximately $590,550, so the typical investment property file we see here sits in the $501,968–$679,133 band. Your specific neighbourhood and property type can move that materially.
What does an investment property mortgage cost on a typical London home?
On London's $590,550 average price, a representative investment property file at minimum down works out to about $118,110 down and roughly $2,435/mo (principal + interest at 4.69% over a 30-year amortization), plus about $8,286 in Ontario land transfer tax. Your exact numbers depend on the property and your file — we run them precisely before you commit.
Why use a London mortgage broker for an investment property mortgage?
A local broker knows Southwest ON's property types and which of our 100+ lenders price investment property files best in London — from Old North and Westmount condos to detached stock — and there's no fee to you on A-lender files. The regional lenders on that panel are listed under the neighbourhood table above.
Is London a good market for a rental property?
It depends entirely on what you are buying it for, and the test is one number rather than an opinion. At the $590,550 average price a single-unit rental here carries $2,927 a month in principal, interest and property tax with $118,110 down — so the question is simply whether a comparable property in London leases above that, and above $3,220 if you want a debt-service lender interested. Rents that clear the first figure but not the second describe an appreciation-and-paydown investment rather than a cash-flow one, which is a legitimate thing to buy as long as you know that is what you bought. We will not quote you a market rent we cannot source; bring three confirmed leases and we will run the file against them.
Can I use rental income to qualify for another property in London?
Yes, and how much it helps depends on a lender convention almost nobody shows you. There are three: 50% of the rent netted against the property's carrying cost, 80% of the rent added to your gross income, or 100% netted against carrying cost. On this property at the $2,927 break-even rent, tested at the 6.69% qualifying rate, the household income required ranges from $23,000 to $84,000 across those three methods on identical facts. Matching your file to the right method moves more than any rate discount on offer.
Who regulates an investment property mortgage in Ontario?
Mortgage Squad Advisors is a licensed Ontario mortgage brokerage — FSRA (Financial Services Regulatory Authority of Ontario) Brokerage Licence #13737. All advisors are licensed and FINTRAC-trained, and every recommendation follows FSRA's conduct and disclosure rules.

Other mortgage solutions in London

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Investment property mortgages in London: helpful guides & tools

Rental cashflow calculatorHELOC for down paymentsBRRRR refinanceCommercial & 5+ unit financing2026 rate outlook

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